Concept explainers
The manager of the deli section of a grocery superstore has just learned that the department has 112 pounds of mayonnaise, of which 70 pounds is approaching its expiration date and must be used. To use up the mayonnaise, the manager has decided to prepare two items: a ham spread and a deli spread. Each pan of the ham spread will require 1.4 pounds of mayonnaise, and each pan of the deli spread will require 1.0 pound. The manager has received an order for 10 pans of ham spread and 8 pans of the deli spread. In addition, the manager has decided to have at least 10 pans of each spread available for sale. Both spreads will cost $3 per pan to make, but ham spread sells for $5 per pan and deli spread sells for $7 per pan.
a. Determine the solution that will minimize cost.
b. Determine the solution that will maximize profit.
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Operations Management
- The Tinkan Company produces one-pound cans for the Canadian salmon industry. Each year the salmon spawn during a 24-hour period and must be canned immediately. Tinkan has the following agreement with the salmon industry. The company can deliver as many cans as it chooses. Then the salmon are caught. For each can by which Tinkan falls short of the salmon industrys needs, the company pays the industry a 2 penalty. Cans cost Tinkan 1 to produce and are sold by Tinkan for 2 per can. If any cans are left over, they are returned to Tinkan and the company reimburses the industry 2 for each extra can. These extra cans are put in storage for next year. Each year a can is held in storage, a carrying cost equal to 20% of the cans production cost is incurred. It is well known that the number of salmon harvested during a year is strongly related to the number of salmon harvested the previous year. In fact, using past data, Tinkan estimates that the harvest size in year t, Ht (measured in the number of cans required), is related to the harvest size in the previous year, Ht1, by the equation Ht = Ht1et where et is normally distributed with mean 1.02 and standard deviation 0.10. Tinkan plans to use the following production strategy. For some value of x, it produces enough cans at the beginning of year t to bring its inventory up to x+Ht, where Ht is the predicted harvest size in year t. Then it delivers these cans to the salmon industry. For example, if it uses x = 100,000, the predicted harvest size is 500,000 cans, and 80,000 cans are already in inventory, then Tinkan produces and delivers 520,000 cans. Given that the harvest size for the previous year was 550,000 cans, use simulation to help Tinkan develop a production strategy that maximizes its expected profit over the next 20 years. Assume that the company begins year 1 with an initial inventory of 300,000 cans.arrow_forwardBlackstone Diary products Limited is a leading producer of dairy products in Western Jamaica. Blackstone Dairy Ltd has customers throughout Jamaica and the Northern Caribbean . The Accounting Information Division prints monthly statements and sends them to the accounts receivable (AR) department, where a clerk mails them to the customers. Blackstone’s customers mail their payments back to the head office, where a clerk in AR batches the cheques and sends them to the cashier. The AR clerk then uses the payment stub to enter the payments into the computer, where the AR master data are updated to record the payment. REQUIRED 1. Draw a context diagram to depict Blackstone’s Accounts receivable System 2. Draw a logical level 0 DFD to document Blackstone’s System. 3. Draw a physical DFD of Blackstone’s AR system.arrow_forwardAt a small but growing airport, the local airline company is purchasing a new tractor for a tractor-trailer train to bring luggage to and from the airplanes. A new mechanized luggage system will be installed in 3 years, so the tractor will not be needed after that. However, because it will receive heavy use, so that the running and maintenance costs will increase rapidly as the tractor ages, it may still be more economical to replace the tractor after 1 or 2 years. The following table gives the total net discounted cost associated with purchasing a tractor (purchase price minus trade-in allowance, plus running and maintenance costs) at the end of year i and trading it in at the end of year j (where year O is now). i 012 1 $13,000 j 2 $28,000 $17,000 3 $48,000 $33,000 $20,000 The problem is to determine at what times (if any) the tractor should be replaced to minimize the total cost for the tractors over 3 years. (a) Formulate this problem as a minimum cost flow problem by showing the…arrow_forward
- At a small but growing airport, the local airline company is purchasing a new tractor for a tractor-trailer train to bring luggage to and from the airplanes. A new mechanized luggage system will be installed in 3 years, so the tractor will not be needed after that. However, because it will receive heavy use, so that the running and maintenance costs will increase rapidly as the tractor ages, it may still be more economical to replace the tractor after 1 or 2 years. The following table gives the total net discounted cost associated with purchasing a tractor (purchase price minus trade-in allowance, plus running and maintenance costs) at the end of year i and trading it in at the end of year j (where year O is now). i B 012 1 $13,000 j 2 $28,000 $17,000 3 $48,000 $33,000 $20,000 The problem is to determine at what times (if any) the tractor should be replaced to minimize the total cost for the tractors over 3 years. (a) Formulate this problem as a shortest-path problem by drawing a…arrow_forward2.28 A foundry produces castings to order. An order for 20 special castings has been re- ceived. Since the casting process is highly variable, not all castings produced are good. The cost of producing each casting is $550; the additional cost of finishing a good casting is $125. If a casting is not good, it is recycled at a value of $75; excess good castings are not finished but are recycled at a value of $75. The customer has agreed to accept 15, 16, 17, 18, 19, or 20 castings at a price of $1250 each. If fewer than 15 good castings are produced, none will be purchased by the customer. Prob- ability distributions for the number of good castings produced in a batch of varying sizes are given below. How many castings should be scheduled in order to maximize expected profit? #Good Castings 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 79 2 PRODUCT, PROCESS, AND SCHEDULE DESIGN Number of Castings Scheduled 15 16 17 0.05 0.00 0.00 0.00 0.00 0.00 0.05 0.05 0.00…arrow_forwardA manufacturer that produces 100 different products is considering building a new warehouse because there is no room in raw material and product warehouses. Because although some products are more than in the warehouse, some demands that come due to the fact that the ban products are not enough in the warehouse are avoided. For this reason, it plans not to miss any demand by producing and storing enough of all its products, and of course it is considering building a new and larger warehouse to store more products. What can you suggest to this company, taking into account what is described in the course, describe your proposal in maximum detail with the concepts described in the course, as applicable activities.arrow_forward
- Company ZWZ manufactures three products in a serial system; Product XA is manufactured in Stage 1, Product XB in Stage 2, and XC in Stage 3. Product XB has a sales potential in the market; hence, some of it can be sold at the end of Stage 2, and the remaining can be moved to Stage 3. The third stage produces Product XC, and then delivers it to customers. Two units of Product XA produced in Stage 1 are required for each unit of Product XB in Stage 2. In addition, four units of Product XB produced in Stage 2 are required for each unit of Product XC in Stage 3. Stage 1 can only use regular time; however, Stage 2 has the options of using regular time and overtime in manufacturing. On the other hand, Stage 3 has only one alternative, which is subcontracting. The pertinent data are provided below: Stage 2 Stage 1 11 No overtime No subcontracting No sales 0.07 Unit regular time cost (TL) Unit overtime cost (TL) Unit subcontracting cost (TL) Unit selling price (TL) Unit processing time (hrs)…arrow_forwardThe practice of directing potential home buycts 10 a particular ates in order wo maintain the bomogeneity of that area is known as A. stecring B. redlining C. solicitation D. blockbusting Destles The practice of directing potential home buyers to a particular area in order to maintain the homogeneity of that area is known as <20D A. steering B. redlining C. solicitation blockbustingarrow_forwardRecently, while eating lunch with your family at a local cafeteria, you observe a practice that is somewhat unusual. As you reach the end of the cafeteria line, an adding machine operator asks how many persons are in your party. He then totals the food purchase on the trays for all of your family and writes the number of persons included in the group on the adding machine tape. He hands you the tape and asks you to pay when you finish eating. Near the end of the meal, you decide you want a piece of pie and coffee so you return to the line, select your food, and again go through the line. The adding machine operator goes through the same procedures, but this time he staples the second tape to the original and returns it to you. When you leave the cafeteria, you hand the stapled adding machine tapes to the cash register operator, who totals the two tapes, takes your money, and puts the tapes on a spindle. a. What internal controls has the cafeteria instituted for its operations? b. How…arrow_forward
- pls helparrow_forwardA grocery store sells a bag of 4 oranges for $2.84. How much would it cost for 5 oranges?arrow_forwardA manufacturer has a production facility that requires 15,604 units of component JY21 per year. Following a long-term contract, the manufacturer purchases component JY21 from a supplier with a lead time of 7 days. The unit purchase cost is $25.6 per unit. The cost to place and process an order from the supplier is $121 per order. The unit inventory carrying cost per year is 10.5 percent of the unit purchase cost. The manufacturer operates 250 days a year. Assume EOQ model is appropriate. If the manufacturer uses a constant order quantity of 2,640 units per order, what is the annual holding cost? Use at least 4 decimal places.arrow_forward
- Practical Management ScienceOperations ManagementISBN:9781337406659Author:WINSTON, Wayne L.Publisher:Cengage,